In a bid to enhance cross-border sales operations from the U.S. to Russia, mail forwarder Bay.ru (Bayru) has launched its own fulfilment service, which it expects to serve half of its delivery operations by the end of the year.
Christened Dostami Express, the new service has required as much as $700,000 in investment since the beginning of the year. “The money went to developing the technological and operational aspects of the service in addition to enhancing warehousing capacities, buying equipment, recruiting and training staff, and developing new partnerships,” the company stated.
Dostami Express partners with several logistics service providers, which allows Bay.ru to choose the best option for each parcel, depending on its final destination. Dostami Express claims that it has “fully automated” the delivery processes and that it benefits from a separate section in customs clearance points.
According to Bay.ru, orders from the US take 7 to 10 days to be delivered to Russian customers with a cost of $20 per parcel. “This is faster than EMS [the Russian Post’s express mail subsidiary] and cheaper than the Russian Post’s First Class air courier service,” the company claims.
Bay.ru is following the steps of several large Russian domestic e-commerce companies – from Ozon to KupiVip to the Otto Group to Wildberries – which have built their own fulfilment infrastructure over the last few years as a response to the Russian Post’s deficiencies.
Founded in 2007 by a young Russian immigrant, Bay.ru was the first cross border operator in Russia. According to CEO Aaron Block, the company offers the largest Russian-language browsable online catalog, with over 200 million items. Bay.ru’s most popular categories are auto parts, fashion, electronics, and collectables.
Among Bay.ru’s competitors are ebaytoday.ru, which also specializes in delivery to Russia, as well as Shipito, Borderlinx, and BongoUS, which operate internationally.
Online cross-border trade may have totaled close to two billion dollars in 2012, almost doubling in one year, according to EWDN experts. Russian consumers appreciate foreign retailers’ diversified assortment and enjoy virtually tax-free purchases. But frequent slowdowns at customs checkpoints and the Russian postal service’s lack of efficiency have also created serious issues, as illustrated by the congestion of Moscow’s airports this past spring.
RUSSIAN E-COMMERCE AND CROSS BORDER SALES REPORTS – The total volume of Russian online retail reached $13 billion last year (up 27% from 2011), not including an approximate $2 billion for cross border sales. In partnership leading universities and consultancies, EWDN has published an in-depth research on this industry.
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